Preparing for company reporting

Previously, the obligation to file reports with the NSI, the National Revenue Agency (NAP) and the Commercial Register applied to all companies, including dormant “zero-return” ones. At present, reports only need to be filed for the company’s first year of inactivity, and the next time only when the company begins to operate.

“Zero-return” companies, as well as companies that carried out activity on a small scale (up to 500 leva), do not need to file a declaration with the NAP. It is sufficient to submit a report to the NSI and a notification to the “Търговски Регистър”. Companies that carried out no activity file a declaration of no economic activity with the NSI information system once. Companies with limited volumes of activity do the same.

The NSI declaration is filed by 30 April of the year following the reporting year. Otherwise, fines are possible. After that, no reports are required until activity resumes.

Legal entities that carried out no activity and are not required to file an annual activity report (GOD) are also exempt from filing the annual declaration with the NAP under the corporate income taxation act.

Please note that the amendments to the law have been in force since 2018. This means that if you failed to submit any reports before that point, you may have to face fines. This is unavoidable when a company is liquidated, when it is audited, or simply when the system reveals missing reports even after several years. The limitation period in Bulgaria has been increased to 10 years, so only after a decade has passed since a report that was not filed as required by law can you be sure that you will not be fined.

Which companies are considered dormant?

The Accountancy Act defines enterprises that carried out no activity during the reporting period as those meeting several conditions at the same time:

• During the reporting period there were no transactions within the meaning of Art. 1 para. 1 of the Commerce Act.
• During the reporting period no conditions arose for the recognition of income in accordance with the Accountancy Act and the recognised accounting standards.
• During the reporting period there was no activity related to investment, sales or production.
• No goods and/or services were acquired for the purpose of subsequently generating income and profit.

In short, during the year there must be a complete absence of any movements on the accounts and of any financial or business operations.

Companies that carried out activity within the limit of 500 leva are required to submit declarations by 2 April if they are registered under the ЗКПО, or by 30 April if registered under the ЗДДФЛ.

To file the declaration with the NSI you need to use the “Business Statistics” Information System, available at https://isbs.nsi.bg. It should be stressed that only holders of an electronic signature, which is required to identify the owner, can work with this system. In addition, special software must be installed for the system to work. The specialists of Bulgarian Expert are ready to help you obtain an electronic signature and to advise you on any matters related to taxation.

Please note that the change in the reporting procedure does not mean that this obligation can be forgotten altogether. If you fail to submit reports and declarations on time or do so incorrectly, you will face serious fines. To avoid this, do not neglect consultations with competent specialists. You can always turn to Bulgarian Expert with questions related to annual reporting.

We wish everyone a successful financial year!

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